Newsmaker: Sen. Don Nickles
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GWEN IFILL: Now to the Assistant Republican leader, Don Nickles of Oklahoma.
Senator Nickles, welcome.
SEN. DON NICKLES: Thank you.
GWEN IFILL: We just heard Senator Daschle say that some of the bipartisan success you enjoyed in the Senate may be a result of Republicans agreeing with Democrats that the president was speaking with a small stick yesterday.
What’s your interpretation of that?
SEN. DON NICKLES: I think that’s a little spin and Tom Daschle is my good friend. I think there’s bipartisan support in the Senate to pass a good reform bill. We’re in the process of doing that.
Senator Gramm (R-Texas), Senator Sarbanes (D-Md.) have been working. There is some differences in the committee bill.
We’ve come a lot closer in the course of the day, we passed the president’s package; we passed a couple other things in addition to that.
My guess is you’ll see a bill that will probably pass maybe late tomorrow night or sometime early next week that will have pretty strong bipartisan support.
GWEN IFILL: And you agree with Senator Daschle that the differences that remain are fairly narrow ones?
SEN. DON NICKLES: I think that’s true. I’m always a little cautious, there’s a few amendments that are out there that I think could do some damage, so I’ve been more concerned about over regulating, going too far..
Doing something on stock options, for example, that might make it to where nobody is going to offer stock to their employees. I don’t want that to happen. That could happen later today or tomorrow or the next couple days. So we have to be careful that we don’t do damage.
Let’s have regulation, let’s make sure we go after the bad guys, we don’t want corporate officers — you know — hiding billions of dollars worth of expenses or not doing proper accounting. But let’s not go too far.
Interesting, I have to take a little shot at Congress. Congress is now acting so self-righteous over demanding that everybody play by the rules in accounting, and there’s probably no organization around that I’m familiar with in the private sector that does more evasive accounting than Congress — this year for the first year in 20 some odd years, we didn’t pass a budget.
And that’s because the Democrats leadership, frankly, in the Senate, there’s no excuse for that.
GWEN IFILL: Let me go back to the overregulation point you made a moment ago.
Do Republicans worry that you may — in embracing these government solutions, in new laws to solve the problem, which has so many Americans so on point, on nervous about this — do you worry that you will be saying that government is the solution to a private sector problem?
SEN. DON NICKLES: No. My concern is I think there’s probably ample laws already, they just need to be enforced. I think they are being enforced. I think most corporate executives are good honorable honest men and women who do good work.
Unfortunately there’s a couple that got carried away in the last several years with the market boom, they became billionaires, they grew very fast, they got into a lot of debt. They were borrowing money, inflating stock prices, and went out and borrowed a lot of — bought big companies, and then maybe bent the rules.
And in doing so have brought a lot of economic havoc, particularly on the telecom sector; it’s really hurt a lot of people. There’s thousands of people that have lost their jobs, I’m very sympathetic with that.
I just want to make sure that Congress — when we’re trying to regulate and make sure that accounting principles are followed, let’s do that — let’s just make sure, though, that we don’t do too much regulation that would cause undue havoc and frankly hurt the marketplace, hurt the economy even more.
GWEN IFILL: When you say there are ample laws already, then why pass the amendment you passed today sponsored by Senator Leahy (D-Vt.) that would create a new statute, a new federal statute for securities fraud?
SEN. DON NICKLES: Well, we want to make sure there’s not securities fraud.
We did increase the penalties, ones that were proposed, frankly, by the president and by Senator Leahy, by Senator Lott (R-Miss.), and others, we passed those amendments. So we’re telling people, hey, we’re not going to put up with security fraud. Crooks, look out. If people are going to be cooking the books, you’re in trouble.
My last comment was, though, that Congress has cooked the books. We passed the bill earlier last year that says, well, let’s not count $15 billion, we’ll just pretend that didn’t happen. We did that. Congress hasn’t passed a budget. The House did, and I complement the House. The House passed the budget, but the Senate has not.
Incidentally, the president proposed many of these things back in March; the House passed it in April.
GWEN IFILL: What’s taking the Senate so long?
SEN. DON NICKLES: Well, again, this is Democrat leadership in the Senate, they call these things up and they didn’t call it up until after the WorldCom failure, and then I think for political purposes they said let’s strike now; let’s try to move now, and we possibly, we probably should have moved on some of these things back in April or May.
GWEN IFILL: Margaret asked Senator Daschle about a comment made by the Democratic National Committee chairman.
Let me ask you about one made by the Republican National Committee Chairman, Mark Racicot, which is that part of what is happening here with these corporate irresponsibility scandals is — stems from a lack of leadership from an era of irresponsibility during the 90s, which he takes to mean the Clinton years.
Are the Republicans now blaming the last Democratic administration for what we see now?
SEN. DON NICKLES: Well, I’m not one to be pointing fingers. But if you look at WorldCom, which is the biggest failure to date, they grew dramatically, they were buying companies that were bigger than they were and they were doing it off inflated stock. When WorldCom bought MCI they were getting awful big; they also tried to buy Sprint, that deal didn’t go through.
But they were borrowing billions and billions of dollars in what was revealed in the last few weeks that brought their downfall was that there was $4 billion that should have been expensed that they didn’t expense; they amortized it and treated it as an asset or tried to spread it out over several years.
And it was clearly something that should have been expensed would have lowered their revenues and their numbers would have been a lot lower and their stock would have gone down, so they were cooking the books.
GWEN IFILL: You’re making a connection between that and the Clinton years?
SEN. DON NICKLES: Well, WorldCom’s growth exploded in the Clinton years, there’s no question, there’s no disputing that.
GWEN IFILL: I’ll also ask but the question of the president’s leadership on this.
Do you think it’s tainted in any way by the question that Margaret raised a moment ago to Senator Daschle about President Bush’s role as a member of the board of Harken Energy in which he sold $800,000 worth of stock?
SEN. DON NICKLES: No.
GWEN IFILL: He didn’t file the required forms -
SEN. DON NICKLES: I think that’s the Democrats playing politics. They’re trying to score points, I think that’s the reason why we moved on this bill this week when we could have moved on it months ago. I think the Democrats, oh, now it’s the opportunity, let’s see if we can’t score some points, the Harken Energy thing, that was a 1990 transaction, it was reviewed by the SEC already; everybody said no problem what so ever. I think some people are just trying to play partisan politics.
GWEN IFILL: Senator Nickles what do you think is happening with the market? Why is it that the president’s speech yesterday, very strong language, the Senate’s clearly aggressive action today in passing some of these amendments, leading up the passage of this bill tomorrow — why is it that the market is still sliding?
SEN. DON NICKLES: Well, I don’t know. I heard that the market was yesterday it slid quite a bit in the last couple hours and there’s speculation there might be another failure in the works today it continued its decline. It depresses me greatly.
I hate to see that happen to — you know — countless shareholders, people who have 401(k)s, people that have investments in the market.
I still happen to think the United States is the greatest place in the world to invest. We have some shakeups that are going on because of a few bad apples. That doesn’t mean that all corporations should be judged like that. Sometimes the market overreacts, it probably went up too much too fast, you know, in the 90s and now it’s, in my opinion, I think it’s probably gone down too much, too much of an accelerated, probably overreacting on the down side.
GWEN IFILL: Does this slide, Senator, mean that government action or inaction might have no effect whatsoever on public confidence?
SEN. DON NICKLES: Well, again, I think right now people are moving in herds, and, you know, a lot of big managers are moving. We saw last Friday the market went up 300 points on the 5th of July. And that’s usually a pretty slow day in trade. So it’s kind of hard to say.
I hope there will be some good news and some good profits, and people will realize we have a lot of outstanding executives, and a lot of companies that are doing a good job, and those are good companies to invest in. And people will be seeking those and hoping to make a decent rate of return. I think there’s some good buys out there right now.
GWEN IFILL: Final question quickly, do you think that SEC Chairman Harvey Pitt will survive this?
SEN. DON NICKLES: Yes, I do.
I think the calls for his resignation are political. He’s only been in office 100 days, he’s already started to implement many of the reforms that the president called for in March.
He could do a lot of those by executive action, some require legislative action. We’re taking the legislative action now. Hopefully well get that done pretty quick.
GWEN IFILL: Senator Nickles, thank you very much for joining us.
SEN. DON NICKLES: Thank you.